Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 38 - No. 6)
What is the impact on the accounting equation when a business owner invests $10,000 of their own money into the business?
Assets decrease, liabilities increase.
Assets increase, equity increases.
Assets decrease, equity decreases.
Liabilities decrease, equity increases.
Explanation
When an owner invests money, the business's assets (cash) increase and the owner's equity increases.
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